Professional Documents
Culture Documents
9 Doles VS Angeles
9 Doles VS Angeles
DECISION
AUSTRIA-MARTINEZ, J.:
This refers to the Petition for Review on Certiorari under Rule 45 of the Rules of Court questioning the Decision 1dated
April 30, 2001 of the Court of Appeals (CA) in C.A.-G.R. CV No. 66985, which reversed the Decision dated July 29, 1998
of the Regional Trial Court (RTC), Branch 21, City of Manila; and the CA Resolution 2 dated August 6, 2001 which denied
petitioner’s Motion for Reconsideration.
On April 1, 1997, Ma. Aura Tina Angeles (respondent) filed with the RTC a complaint for Specific Performance with
Damages against Jocelyn B. Doles (petitioner), docketed as Civil Case No. 97-82716. Respondent alleged that petitioner
was indebted to the former in the concept of a personal loan amounting to P405,430.00 representing the principal amount
and interest; that on October 5, 1996, by virtue of a "Deed of Absolute Sale", 3 petitioner, as seller, ceded to respondent, as
buyer, a parcel of land, as well as the improvements thereon, with an area of 42 square meters, covered by Transfer
Certificate of Title No. 382532,4 and located at a subdivision project known as Camella Townhomes Sorrente in Bacoor,
Cavite, in order to satisfy her personal loan with respondent; that this property was mortgaged to National Home Mortgage
Finance Corporation (NHMFC) to secure petitioner’s loan in the sum of P337,050.00 with that entity; that as a condition
for the foregoing sale, respondent shall assume the undue balance of the mortgage and pay the monthly amortization
of P4,748.11 for the remainder of the 25 years which began on September 3, 1994; that the property was at that time
being occupied by a tenant paying a monthly rent of P3,000.00; that upon verification with the NHMFC, respondent
learned that petitioner had incurred arrearages amounting to P26,744.09, inclusive of penalties and interest; that upon
informing the petitioner of her arrears, petitioner denied that she incurred them and refused to pay the same; that despite
repeated demand, petitioner refused to cooperate with respondent to execute the necessary documents and other
formalities required by the NHMFC to effect the transfer of the title over the property; that petitioner collected rent over the
property for the month of January 1997 and refused to remit the proceeds to respondent; and that respondent suffered
damages as a result and was forced to litigate.
Petitioner, then defendant, while admitting some allegations in the Complaint, denied that she borrowed money from
respondent, and averred that from June to September 1995, she referred her friends to respondent whom she knew to be
engaged in the business of lending money in exchange for personal checks through her capitalist Arsenio Pua. She
alleged that her friends, namely, Zenaida Romulo, Theresa Moratin, Julia Inocencio, Virginia Jacob, and Elizabeth
Tomelden, borrowed money from respondent and issued personal checks in payment of the loan; that the checks
bounced for insufficiency of funds; that despite her efforts to assist respondent to collect from the borrowers, she could no
longer locate them; that, because of this, respondent became furious and threatened petitioner that if the accounts were
not settled, a criminal case will be filed against her; that she was forced to issue eight checks amounting to P350,000 to
answer for the bounced checks of the borrowers she referred; that prior to the issuance of the checks she informed
respondent that they were not sufficiently funded but the latter nonetheless deposited the checks and for which reason
they were subsequently dishonored; that respondent then threatened to initiate a criminal case against her for violation
of Batas Pambansa Blg. 22; that she was forced by respondent to execute an "Absolute Deed of Sale" over her property
in Bacoor, Cavite, to avoid criminal prosecution; that the said deed had no valid consideration; that she did not appear
before a notary public; that the Community Tax Certificate number on the deed was not hers and for which respondent
may be prosecuted for falsification and perjury; and that she suffered damages and lost rental as a result.
The RTC identified the issues as follows: first, whether the Deed of Absolute Sale is valid; second; if valid, whether
petitioner is obliged to sign and execute the necessary documents to effect the transfer of her rights over the property to
the respondent; and third, whether petitioner is liable for damages.
On July 29, 1998, the RTC rendered a decision the dispositive portion of which states:
WHEREFORE, premises considered, the Court hereby orders the dismissal of the complaint for insufficiency of evidence.
With costs against plaintiff.
SO ORDERED.
The RTC held that the sale was void for lack of cause or consideration: 5
Plaintiff Angeles’ admission that the borrowers are the friends of defendant Doles and further admission that the checks
issued by these borrowers in payment of the loan obligation negates [sic] the cause or consideration of the contract of
sale executed by and between plaintiff and defendant. Moreover, the property is not solely owned by defendant as
appearing in Entry No. 9055 of Transfer Certificate of Title No. 382532 (Annex A, Complaint), thus:
"Entry No. 9055. Special Power of Attorney in favor of Jocelyn Doles covering the share of Teodorico Doles on the parcel
of land described in this certificate of title by virtue of the special power of attorney to mortgage, executed before the
notary public, etc."
The rule under the Civil Code is that contracts without a cause or consideration produce no effect whatsoever. (Art. 1352,
Civil Code).
Respondent appealed to the CA. In her appeal brief, respondent interposed her sole assignment of error:
THE TRIAL COURT ERRED IN DISMISSING THE CASE AT BAR ON THE GROUND OF [sic] THE DEED OF SALE
BETWEEN THE PARTIES HAS NO CONSIDERATION OR INSUFFICIENCY OF EVIDENCE. 6
On April 30, 2001, the CA promulgated its Decision, the dispositive portion of which reads:
WHEREFORE, IN VIEW OF THE FOREGOING, this appeal is hereby GRANTED. The Decision of the lower court dated
July 29, 1998 is REVERSED and SET ASIDE. A new one is entered ordering defendant-appellee to execute all necessary
documents to effect transfer of subject property to plaintiff-appellant with the arrearages of the former’s loan with the
NHMFC, at the latter’s expense. No costs.
SO ORDERED.
The CA concluded that petitioner was the borrower and, in turn, would "re-lend" the amount borrowed from the respondent
to her friends. Hence, the Deed of Absolute Sale was supported by a valid consideration, which is the sum of money
petitioner owed respondent amounting to P405,430.00, representing both principal and interest.
The CA took into account the following circumstances in their entirety: the supposed friends of petitioner never presented
themselves to respondent and that all transactions were made by and between petitioner and respondent; 7 that the money
borrowed was deposited with the bank account of the petitioner, while payments made for the loan were deposited by the
latter to respondent’s bank account;8 that petitioner herself admitted in open court that she was "re-lending" the money
loaned from respondent to other individuals for profit; 9 and that the documentary evidence shows that the actual
borrowers, the friends of petitioner, consider her as their creditor and not the respondent. 10
Furthermore, the CA held that the alleged threat or intimidation by respondent did not vitiate consent, since the same is
considered just or legal if made to enforce one’s claim through competent authority under Article 1335 11 of the Civil
Code;12 that with respect to the arrearages of petitioner on her monthly amortization with the NHMFC in the sum
of P26,744.09, the same shall be deemed part of the balance of petitioner’s loan with the NHMFC which respondent
agreed to assume; and that the amount of P3,000.00 representing the rental for January 1997 supposedly collected by
petitioner, as well as the claim for damages and attorney’s fees, is denied for insufficiency of evidence. 13
On May 29, 2001, petitioner filed her Motion for Reconsideration with the CA, arguing that respondent categorically
admitted in open court that she acted only as agent or representative of Arsenio Pua, the principal financier and, hence,
she had no legal capacity to sue petitioner; and that the CA failed to consider the fact that petitioner’s father, who co-
owned the subject property, was not impleaded as a defendant nor was he indebted to the respondent and, hence, she
cannot be made to sign the documents to effect the transfer of ownership over the entire property.
On August 6, 2001, the CA issued its Resolution denying the motion on the ground that the foregoing matters had already
been passed upon.
On August 13, 2001, petitioner received a copy of the CA Resolution. On August 28, 2001, petitioner filed the present
Petition and raised the following issues:
I.
II.
WHETHER OR NOT AN AGENT WHO WAS NOT AUTHORIZED BY THE PRINCIPAL TO COLLECT DEBT IN
HIS BEHALF COULD DIRECTLY COLLECT PAYMENT FROM THE DEBTOR.
III.
Although, as a rule, it is not the business of this Court to review the findings of fact made by the lower courts,
jurisprudence has recognized several exceptions, at least three of which are present in the instant case, namely: when the
judgment is based on a misapprehension of facts; when the findings of facts of the courts a quo are conflicting; and when
the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, could justify
a different conclusion.15 To arrive at a proper judgment, therefore, the Court finds it necessary to re-examine the evidence
presented by the contending parties during the trial of the case.
The Petition is meritorious.
The principal issue is whether the Deed of Absolute Sale is supported by a valid consideration.
1. Petitioner argues that since she is merely the agent or representative of the alleged debtors, then she is not a party to
the loan; and that the Deed of Sale executed between her and the respondent in their own names, which was predicated
on that pre-existing debt, is void for lack of consideration.
Indeed, the Deed of Absolute Sale purports to be supported by a consideration in the form of a price certain in
money16 and that this sum indisputably pertains to the debt in issue. This Court has consistently held that a contract of
sale is null and void and produces no effect whatsoever where the same is without cause or consideration. 17 The question
that has to be resolved for the moment is whether this debt can be considered as a valid cause or consideration for the
sale.
To restate, the CA cited four instances in the record to support its holding that petitioner "re-lends" the amount borrowed
from respondent to her friends: first, the friends of petitioner never presented themselves to respondent and that all
transactions were made by and between petitioner and respondent; 18 second; the money passed through the bank
accounts of petitioner and respondent;19 third, petitioner herself admitted that she was "re-lending" the money loaned to
other individuals for profit;20 and fourth, the documentary evidence shows that the actual borrowers, the friends of
petitioner, consider her as their creditor and not the respondent. 21
On the first, third, and fourth points, the CA cites the testimony of the petitioner, then defendant, during her cross-
examination:22
Atty. Diza:
q. You also mentioned that you were not the one indebted to the plaintiff?
witness:
a. Yes, sir.
Atty. Diza:
q. And you mentioned the persons[,] namely, Elizabeth Tomelden, Teresa Moraquin, Maria Luisa Inocencio,
Zenaida Romulo, they are your friends?
witness:
a. Inocencio and Moraquin are my friends while [as to] Jacob and Tomelden[,] they were just referred.
Atty. Diza:
witness:
a. Yes, sir.
Atty. Diza:
witness:
a. To refer those persons to Aura and to refer again to Arsenio Pua, sir.
Atty. Diza:
q. Did the plaintiff personally see the transactions with your friends?
witness:
a. No, sir.
Atty. Diza:
a. Yes, sir.
Atty. Diza:
witness:
a. We are both intermediaries. As evidenced by the checks of the debtors they were deposited to the name of
Arsenio Pua because the money came from Arsenio Pua.
xxxx
Atty. Diza:
q. Did the plaintiff knew [sic] that you will lend the money to your friends specifically the one you mentioned [a]
while ago?
witness:
Atty. Diza:
witness:
a. Yes, sir.
Atty. Diza:
witness:
a. Yes, sir.
Atty. Diza:
q. How much?
witness:
a. Two percent to Tomelden, one percent to Jacob and then Inocencio and my friends none, sir.
Based on the foregoing, the CA concluded that petitioner is the real borrower, while the respondent, the real
lender.
But as correctly noted by the RTC, respondent, then plaintiff, made the following admission during her cross
examination:23
Atty. Villacorta:
witness:
Atty. Villacorta:
witness:
a. Yes, because I am only representing him, sir.
Atty. Villacorta:
witness:
a. Yes, sir.
Court:
witness:
Atty. Villacorta:
q. Is it not a fact Ms. Witness that the defendant borrowed from you to accommodate somebody, are you aware of
that?
witness:
a. I am aware of that.
Atty. Villacorta:
witness:
xxxx
Atty. Villacorta:
q. And these friends of the defendant borrowed money from you with the assurance of the defendant?
witness:
xxxx
Atty. Villacorta:
q. And is it not also a fact Madam witness that everytime that the defendant borrowed money from you her friends
who [are] in need of money issued check[s] to you? There were checks issued to you?
witness:
Atty. Villacorta:
witness:
a. Yes, sir.
Atty. Villacorta:
q. And because of your assistance, the friends of the defendant who are in need of money were able to obtain
loan to [sic] Arsenio Pua through your assistance?
witness:
a. Yes, sir.
Atty. Villacorta:
witness:
a. Yes, sir.
Atty. Villacorta:
q. And some of the checks that were issued by the friends of the defendant bounced, am I correct?
witness:
a. Yes, sir.
Atty. Villacorta:
witness:
a. Yes, sir.
Respondent is estopped to deny that she herself acted as agent of a certain Arsenio Pua, her disclosed principal. She is
also estopped to deny that petitioner acted as agent for the alleged debtors, the friends whom she (petitioner) referred.
This Court has affirmed that, under Article 1868 of the Civil Code, the basis of agency is representation. 25 The question of
whether an agency has been created is ordinarily a question which may be established in the same way as any other fact,
either by direct or circumstantial evidence. The question is ultimately one of intention. 26 Agency may even be implied from
the words and conduct of the parties and the circumstances of the particular case. 27Though the fact or extent of authority
of the agents may not, as a general rule, be established from the declarations of the agents alone, if one professes to act
as agent for another, she may be estopped to deny her agency both as against the asserted principal and the third
persons interested in the transaction in which he or she is engaged. 28
In this case, petitioner knew that the financier of respondent is Pua; and respondent knew that the borrowers are friends
of petitioner.
The CA is incorrect when it considered the fact that the "supposed friends of [petitioner], the actual borrowers, did not
present themselves to [respondent]" as evidence that negates the agency relationship—it is sufficient that petitioner
disclosed to respondent that the former was acting in behalf of her principals, her friends whom she referred to
respondent. For an agency to arise, it is not necessary that the principal personally encounter the third person with whom
the agent interacts. The law in fact contemplates, and to a great degree, impersonal dealings where the principal need not
personally know or meet the third person with whom her agent transacts: precisely, the purpose of agency is to extend the
personality of the principal through the facility of the agent. 29
In the case at bar, both petitioner and respondent have undeniably disclosed to each other that they are representing
someone else, and so both of them are estopped to deny the same. It is evident from the record that petitioner merely
refers actual borrowers and then collects and disburses the amounts of the loan upon which she received a commission;
and that respondent transacts on behalf of her "principal financier", a certain Arsenio Pua. If their respective principals do
not actually and personally know each other, such ignorance does not affect their juridical standing as agents, especially
since the very purpose of agency is to extend the personality of the principal through the facility of the agent.
With respect to the admission of petitioner that she is "re-lending" the money loaned from respondent to other individuals
for profit, it must be stressed that the manner in which the parties designate the relationship is not controlling. If an act
done by one person in behalf of another is in its essential nature one of agency, the former is the agent of the latter
notwithstanding he or she is not so called.30 The question is to be determined by the fact that one represents and is acting
for another, and if relations exist which will constitute an agency, it will be an agency whether the parties understood the
exact nature of the relation or not.31
That both parties acted as mere agents is shown by the undisputed fact that the friends of petitioner issued checks in
payment of the loan in the name of Pua. If it is true that petitioner was "re-lending", then the checks should have been
drawn in her name and not directly paid to Pua.
With respect to the second point, particularly, the finding of the CA that the disbursements and payments for the loan were
made through the bank accounts of petitioner and respondent,
suffice it to say that in the normal course of commercial dealings and for reasons of convenience and practical utility it can
be reasonably expected that the facilities of the agent, such as a bank account, may be employed, and that a sub-agent
be appointed, such as the bank itself, to carry out the task, especially where there is no stipulation to the contrary. 32
In view of the two agency relationships, petitioner and respondent are not privy to the contract of loan between their
principals. Since the sale is predicated on that loan, then the sale is void for lack of consideration.
2. A further scrutiny of the record shows, however, that the sale might have been backed up by another consideration that
is separate and distinct from the debt: respondent averred in her complaint and testified that the parties had agreed that
as a condition for the conveyance of the property the respondent shall assume the balance of the mortgage loan which
petitioner allegedly owed to the NHMFC.33 This Court in the recent past has declared that an assumption of a mortgage
debt may constitute a valid consideration for a sale. 34
Although the record shows that petitioner admitted at the time of trial that she owned the property described in the
TCT,35 the Court must stress that the Transfer Certificate of Title No. 382532 36 on its face shows that the owner of the
property which admittedly forms the subject matter of the Deed of Absolute Sale refers neither to the petitioner nor to her
father, Teodorico Doles, the alleged co-owner. Rather, it states that the property is registered in the name of "Household
Development Corporation." Although there is an entry to the effect that the petitioner had been granted a special power of
attorney "covering the shares of Teodorico Doles on the parcel of land described in this certificate," 37 it cannot be inferred
from this bare notation, nor from any other evidence on the record, that the petitioner or her father held any direct interest
on the property in question so as to validly constitute a mortgage thereon 38 and, with more reason, to effect the delivery of
the object of the sale at the consummation stage.39 What is worse, there is a notation that the TCT itself has been
"cancelled."40
possibility that respondent agreed to assume the balance of the mortgage loan which petitioner allegedly owed to the
NHMFC, especially since the record is bereft of any factual finding that petitioner was, in the first place, endowed with any
ownership rights to validly mortgage and convey the property. As the complainant who initiated the case, respondent
bears the burden of proving the basis of her complaint. Having failed to discharge such burden, the Court has no choice
but to declare the sale void for lack of cause. And since the sale is void, the Court finds it unnecessary to dwell on the
issue of whether duress or intimidation had been foisted upon petitioner upon the execution of the sale.
Moreover, even assuming the mortgage validly exists, the Court notes respondent’s allegation that the mortgage with the
NHMFC was for 25 years which began September 3, 1994. Respondent filed her Complaint for Specific Performance in
1997. Since the 25 years had not lapsed, the prayer of respondent to compel petitioner to execute necessary documents
to effect the transfer of title is premature.
WHEREFORE, the petition is granted. The Decision and Resolution of the Court of Appeals are REVERSED and SET
ASIDE. The complaint of respondent in Civil Case No. 97-82716 is DISMISSED.
SO ORDERED.